Shares of Dominion Diamond Corp. jumped on Tuesday following news that a Toronto-based hedge fund is pressing for sweeping changes at the Arctic miner.
K2 & Associates Investment Management Inc. released a letter on Monday in which it said it represented a group of investors that had collectively amassed a 5.4-per-cent stake in Dominion, the world’s third-largest producer of rough diamonds by value.
Josef Vejvoda, a portfolio manager at K2, wrote in the letter that Dominion’s share price has “suffered excessively and unnecessarily as a result of misguided policies and missed opportunities.” He pushed for a meeting with independent directors of the Toronto-based miner to discuss how to halt “the continued erosion of shareholder value.”
Dominion fired back on Tuesday with a news release in which it said it “looks forward to an open dialogue” with the investors. It declined a request for additional comment.
Bloomberg reported that Dominion has hired Rothschild & Co. to advise on a potential sale of the company, which has a market capitalization of roughly $1.2-billion following a surge of as much as 24 per cent in its share price on Tuesday.
Before the big jump, Dominion’s share price had tumbled by around half this year. But it was still outperforming its nearest counterpart, Petra Diamonds Ltd., which has seen its share price sink 55 per cent since the start of January.
For the rest of this article, click here: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/dominion-diamond-said-to-explore-sale-as-shareholders-revolt/article27901708/